The future of retirement for state workers

For most of us, retirement is something we look forward to; we anticipate days spent with loved ones and engaging in new and interesting hobbies that our careers precluded us from devoting time to. Whether it’s in the private or public sector, as we work toward retirement, we strive for the ultimate security of knowing that our families will be taken care of in our later years.
This is the case for many Californians who have served, and continue to serve, the people of this state as public safety workers, teachers, administrators, and in thousands of other essential jobs. Pensions and health benefits have been promised to these government workers and Governor Schwarzenegger has made it clear that these promised benefits must be paid. However, these rising obligations represent one of the biggest budget problems facing our state lawmakers and local government leaders throughout California.
State Controller John Chiang estimated that the unfunded liability for health care owed to retired state workers over the next 30 years is $47.9 billion. The number is substantial. However, as the governor has said, the promises made to our state’s workers must be kept and funded in a way that will not negatively impact other government services or place the burden on future generations.
One part of the governor’s comprehensive approach to finding a solution to this
problem is the Public Employee Post-Employment Benefits Commission. By establishing this commission, he has made it very clear that addressing one of California’s largest and fastest growing budget issues–the unfunded health care and pension liabilities–is a top priority and will be dealt with in an open and bipartisan way.
The commission is bipartisan, made-up of financial and public-policy experts, as well as representatives of local government and labor. Our charge is three fold. First, we will be identifying the full amount of post-employment health care and dental benefits that California governments are liable for, which remain unfunded. Secondly, we will evaluate various approaches for addressing governments’ unfunded retirement health care and pension obligations. Third, we will propose a plan to address these unfunded obligations.
As we move forward with our charge, public input is vital. We are in the process of holding public hearings throughout the state. These hearings give us an opportunity to bring this matter to every part of California and to educate local communities about the importance of the issue for our workforce, the taxpayers, and generations to come. They also provide us an opportunity to hear the local perspective of this statewide issue.
Our next hearing will be August 23, in San Jose. At this hearing we will start looking at possible solutions for this very complex issue. As with each of our hearings, it will be broadcast live on our Web site,, and I encourage public employees and anyone else who is interested to watch it live.
As we work hard to find solutions that will honor our commitments to California’s retired work force, we will seek a responsible plan that will protect other vital government services and not saddle future generations with the bill. I commend Governor Schwarzenegger for his bipartisan and comprehensive approach to this issue that we all agree needs to be addressed.

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